Northern Nigeria Flour Mills (NNFM), Nigeria’s leading integrated food and agro-allied group, in its recently released half-year financial result for the period ended 30th September 2022 has reported a 29 percent decline in volumes produced, driven by higher input costs.
The owners of the iconic food brand, ‘Golden Penny’ reported a decline in volume produced to 17,621 thousand metric tonnes in September 2022 from 24,914 thousand metric tonnes in the corresponding period of 2021.
The firm’s cost of sales which claimed 90.66 percent of the total revenue in the period amounted to N7.47 billion in September 2022, from N7.38 billion in September 2021.
Revenue reported grew marginally by 2.87 percent to N8.24 billion in September 2022 from N8.01 billion in September 2021, the highest reported in 8 years.
Its profit, however, grew faster than the revenue by 13.87 percent to N197 million in the six months period that ended September 2022 from N173 million in the corresponding period of 2021.
Consequently, the profit margin reported by the firm grew at a slow pace by 23 basis points to 2.39 percent in September 2022 from 2.16 percent in September 2021.
The consumer goods firm also reported a 112 percent increase in bad debts which amounted to N154 million in September 2022.
Bad debts refer to an expense that a business incurs once the repayment of credit previously extended to a customer is estimated to be uncollectible.
Therefore, bringing administrative expenses to the amount of N477 million in September 2022, a 35.13 percent increase from N353 million reported in September 2021.
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Its selling and distribution expenses also grew by 55 percent to N93 million in the six months period that ended September 2022 from N60 million in the same period last year.
Finance costs declined by 69 percent during the period amounting to N30.7 million in September 2022 from N97.8 million in September 2021, indicating that the company can generate enough cash and income to service its debt and pay timely instalments.
Its total assets increased by 36 percent to N12.42 billion in the six months period that ended September 2022 from N9.10 billion in the corresponding period of 2021.
However, its shareholder’s equity was down by 0.23 percent to N2.993 billion in September 2022 from N2.997 billion in September 2021.
Total cash and cash equivalent reported decreased by 34.48 percent to N631 million in September 2022 from N963 million in September 2021.
Net cash from operations during the period was negative, amounting to N-83 million in September 2022 from N2.28 billion in September 2021.
The consumer goods firm purchased property, plant, and equipment during the period, bringing its net cash used in investing activities for the period (September 2022) to N82.97 million.
Net cash generated from financing activities totalled N-164.8 million in the six months period ended 2022, with repayment of borrowings and interest paid on borrowings amounting to N77 million and N88 million respectively.
Earnings per share reported by the company in the six months period ended 2022 amounted to N110 per share.
Northern Nigeria Flour Mills Limited is a Nigeria-based company engaged in the milling of wheat, sorghum, maize, and similar grains. The company’s services include toll milling, fortification, and ready-to-use supplementary foods (RUSF).
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